Do you have collection accounts on your credit reports, there’s no doubt you just want them to go away. While we have some tips for how to remove collections from your credit report, it’s important to keep in mind that, by federal law, they can be reported for seven years from the date you first fell behind with the original creditor. That probably feels like forever. The idea that you can get the collection agency to remove the account if you pay it could be appealing, but it’s trickier than you may think.
The first step to dealing with this situation is to get your credit reports and scores so you can understand exactly what’s being reported and how it affects your scores. You can get a free credit report every year from each of the major credit reporting agencies – Equifax, Experian and TransUnion
In short, what works is writing a pay for delete letter, waiting it out and asking for removal due to goodwill. What generally helps, but doesn’t benefit your credit report, is paying off a collection normally, without getting it removed.
How to Pay for Collection Removal
Consumers sometimes ask collection agencies to remove the collection account from their credit reports in exchange for payment. Sometimes collection agencies make this kind of offer, but usually it’s the debtor who tries to negotiate a pay for removal deal.
Collection agencies will often respond to this request by stating that they are unable to remove the negative information. To a larger extent, that’s true. The credit reporting agencies prohibit this activity since they have contracts with these collection agencies. (Otherwise, collection accounts would be removed all the time and credit reports would not accurately reflect the consumer’s creditworthiness.) If you choose to pay for delete then ensure you have the agreement in writing so you have proof of what the collector agreed to do for you.
At the same time, collection agencies can’t report information that’s inaccurate or incomplete. So if you found yourself with a collection account on your credit report because you had a legitimate dispute with a creditor or service provider, it’s perfectly reasonable to request that collection account be removed if you pay the bill.
Goodwill Deletions. If you have extremely great credit history, barring an isolated error or short series of late payments, you might consider writing a goodwill letter to your creditor. Having paid the debt and being able to prove you’re not a risky borrower look good to a creditor and they might remove the negative information from your credit report out of goodwill. Asking for a goodwill deletion or adjustment sounds better to creditors since requesting they remove negative information from your reports is actually against the rules put in place by the credit reporting agencies. Send the letter by mail, preferably with a receipt or certified mail so you know it arrives. Use the address on your credit report, but double check that it’s correct on the creditor’s website. This strategy has more success than you might imagine, so if your credit history is promising, consider this option. Look online for successful goodwill letters to use as templates to expedite the process even further.
Paying Off CollectionsUnfortunately, simply paying a collection account without getting it removed often won’t improve your credit scores. With few exceptions, as long as a collection account is listed on your credit reports it’ll have a negative impact on your credit scores. Make sure you keep evidence of the date of the delinquency because some collectors attempt to push back the start date and keep the debt on your credit report for an extended period of time.
While it’s discouraging to know that paying collection accounts won’t help your credit scores, keep in mind that as this information gets older, it’ll have less and less of an impact. That’s particularly true if you’re building new, positive credit references.
Disputing a Collection accounts.
First of all, if the collection on your report isn’t yours, don’t pay it. Have the credit reporting agencies remove it from your account after you formally dispute it. If a collector keeps a debt on your credit report for an extended period of time, past seven years, you can dispute the debt and have it removed, especially if you have proof of the start of the delinquency.
If anything at all on the collection is inaccurate, make a note and demand that the information be updated or otherwise the collection should be removed. Sometimes when creditors go back to look at collections they can’t validate them, and then they’re required to remove them entirely. This fact also applies within the first 30 days of receiving notice of a collection. You should immediately contact the collector and request debt validation because if they don&
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